Benefits to be had all around

Vanessa Wilson wants to work from home so she can still spend time with her son, Flynn. Picture / Dean Purcell

Regardless of whether Helen Clark or Don Brash is Prime Minister tomorrow night, Auckland solo mum Vanessa Wilson will be a winner from this extraordinary election.

Ms Wilson, 33, returned to New Zealand in February after eight years in Australia. She was pregnant with her first child, but her husband had been violent.

"We are here because of safety," she says. She and her son, Flynn, now 4 months old, live with her parents in Hillsborough.

She receives the domestic purposes benefit of $241.47 a week and family support of $72. She pays $150 in rent to her parents but gets $50.40 of this paid by the accommodation supplement.

Assuming no inflation, she will get exactly the same in 2008 if Dr Brash wins tomorrow and $10 a week more with Labour, if she stays on the benefit.

But she has no intention of staying on the benefit. She is exactly the person that both parties want to help because she intends to help herself.

"I'm going to open up my own secretarial/business support business at home so I can work at home with Flynn. I didn't come home to have him in day care," she says.

"I have bought the new set-up. I will do it all here. People will send me work, and I'll just type and email it to them. I'm looking at building a website.

"A friend is doing it in Sydney. She's got 10 mothers working for her."

She plans to set up a company, charge $30 an hour and build up her hours gradually as Flynn gets older. In two to five years she believes she could earn $40,000 a year, requiring an average of just over 25 hours a week. On the present tax scale, if she works 25 hours and earns $750 a week gross, she would get $592.15 after tax. There would be nothing left of her benefit, family support or accommodation supplement.

If Helen Clark wins tomorrow, two big changes would lift Ms Wilson's potential net income by almost $130 a week by 2008, assuming that by then she will be working 25 hours.

First, a new "in-work payment" of $60 per family starts next April for non-beneficiary sole parents working for at least 20 hours a week and for couples working at least 30 hours.

Second, the amount families can earn before starting to lose their family support and in-work payments would rise from $391 to $673 a week, and then they would lose the payments at only 20c for every extra dollar of income, compared with 30c now. Ms Wilson, by then earning $750 a week, would get to keep almost all her family support.

If Dr Brash wins tomorrow, he has pledged to keep the in-work payment and match the new phase-out rate of 20c in the dollar. He would make two other changes - for Ms Wilson, one bad and one good.

The bad news is that he would scrap a $10 increase in family support that Labour plans for 2007 and would start cutting back family support from an income of $577 a week instead of $673. Ms Wilson's net family support and in-work payment would drop from $127 under Labour to $97 under National.

But the good news is that National's famous tax cuts would cut her taxes from $155 under Labour to $142.

Overall, she would end up with $705.50 a week under National or $721.75 under Labour, making her marginally better off with Labour.

However, if she increased her hours to 40 a week she would get more benefit from National's tax cuts, earning $941.22 a week with National or marginally less, $930.92, with Labour.

Under both parties, the new in-work payment will dramatically boost her incentives to increase her hours from 15 to 25 a week. At the moment that shift would leave her only a third of her extra income in the hand, after losing family support and the accommodation supplement. Under both parties, she will keep three-quarters of the extra income in the hand by 2008.

Whoever wins, Ms Wilson is overjoyed.

"That's really good," she says. "That will stop me going back to Australia."

In Brisbane, she had to work 50 hours a week to earn A$40,000 ($43,500) in Qantas's human resources department. She earned more in Sydney before that but could not afford to buy a house there.

Now she plans to save to buy a house, perhaps in a rural area.

"Why would I go back?" she asked.

"I'm living in the best country in the world. There's nowhere else to bring your children up that's better than here."